WASHINGTON – The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced that Coltec Industries Inc., (Coltec) and National Steel and Shipbuilding Company (NASSCO) have agreed to pay a civil penalty of $280,000 and spend approximately $500,000 on an environmental project to resolve alleged violations of the Clean Air Act (CAA) and EPA’s marine diesel engine air rules. The project will significantly reduce nitrogen oxide emissions from a testing stack at Coltec’s Beloit, Wis., engine manufacturing facility, improving air quality for residents. Coltec and NASSCO also agreed to attach the required EPA engine labels to 40 ship engines that were previously unlabeled or improperly labeled.

“EPA is committed to enforcing the Clean Air Act’s standards for engines, including ship engines,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “By ensuring that engines meet requirements and encouraging environmental projects that benefit nearby communities, we are making the air cleaner and healthier for the residents of southern Wisconsin.”

“This is the first time a settlement addresses Clean Air Act violations in the marine engine manufacturing and ship building industries. Under the settlement, Coltec and NASSCO will pay a just penalty and achieve compliance with the nation’s Clean Air Act and EPA’s emissions control regulations,” said Ignacia S. Moreno, assistant attorney general for the Environment and Natural Resources Division. “Compliance with the Clean Air Act by all industries is essential to preventing harmful pollutants from being released into the environment, whether on land or at sea.”

The CAA prohibits marine diesel engines from being sold in the U.S. unless the engines are covered by a certificate of conformity and have an EPA label indicating that the engine meets applicable emission standards. Engines that are not certified may be operating without proper emissions controls and emitting excess carbon monoxide and nitrogen oxides. These excess emissions can cause respiratory illnesses, aggravate asthma and contribute to the formation of ground level ozone or smog.

On Sep. 30, 2010, the United States filed a complaint which alleged that Coltec violated the CAA by manufacturing and selling 32 marine diesel engines that were not covered by an EPA-issued certificate of conformity and that NASSCO violated the CAA by installing those engines in ships that NASSCO built and sold to the U.S. Navy. The complaint also alleged that the 32 uncertified Coltec engines, plus eight more certified engines Coltec sold to NASSCO, had missing or improper emissions compliance labels required by EPA’s regulations. Finally, the complaint alleged that NASSCO further violated the CAA by manufacturing and selling ships containing an additional six uncertified engines.

The settlement also includes a supplemental environmental project in which Coltec and NASSCO will install a nitrogen oxide (NOx) control system to an engine test stand exhaust stack connected to Coltec’s Beloit, Wis., engine manufacturing facility. The engine test stand is used for testing large marine diesel engines that are manufactured and sold by Coltec for use in U.S. Navy ships. The NOx controls required by the settlement are estimated to reduce levels of NOx by at least 85 percent, from approximately 102 pounds emitted per hour to approximately 16 pounds per hour. The estimated cost to implement the project is $500,000 and will benefit the city of Beloit, Wis., by improving air quality near the facility, particularly in the adjacent Merrill neighborhood.

Coltec is a subsidiary of EnPro Industries Inc. and operates Fairbanks Morse Engine (FME), which supplies marine propulsion and ship service systems to the U.S. Navy and U.S. Coast Guard.

NASSCO is a subsidiary of General Dynamics. NASSCO designs and builds support ships, oil tankers, and dry cargo carriers for the U.S. Navy and commercial markets.

The consent decree, lodged in the U.S. District Court for the District of Columbia, is subject to a 30-day public comment period and court approval.